Casco National Bank v. Shaw

Promissory notes. Notice of protest. Indorsers, notice to, when insolvent. Mailing notice in street letter boxes. Practice. Notice of the dishonor of a note indorsed by an insolvent firm is sufficient if addressed to the firm at its former place of business, where its affairs are being settled by a trustee to whom the firm has made an assignment for the benefit of its creditors and is received by the trustee. Depositing such a notice, properly addressed, in a street letter box, put up by the Post Office Department is as truly mailed as if deposited in the letter box within the post office building itself. Money received by the holder of a note, upon a contract to assign the note to the person paying such money, is not a payment on the note, which the indorser may have applied in a suit by the holder against the indorser. When the defendant in a pending action is in insolvency, the continuance of the action until the termination of the insolvency proceedings is within the discretion of the court, and can not be claimed by the defendant as a matter of right.

On report. Four actions between the same parties were submitted by the report on the same facts. The first action was assumpsit on five promissory notes of ten thousand dollars each, signed by John F. Mills, and indorsed by the defendants ; the second action was assumpsit on two promissory notes of forty-six hundred and thirty-nine dollars each, signed by W. E. Plummer, and indorsed by the defendants, and on three promissory notes of §4,659.78, $4,675.31 and $4,658.61, respectively, signed by Chas. W. Clement and indorsed by the defendants; the third action was assumpsit on seven promissory notes of $4,867.50, $4,754.63, $4,516.96, $3,996.59, $4,439.40, $4,713.61 and $4,916.84, respectively, signed by W. E. Plummer and indorsed by the defendants, and on three promissory notes of $4.411.21, $4,362.19, and $4,409.60, respectively, signed by John F. Mills & Co. and indorsed by the defendants ; the fourth action was assumpsit on three promissory notes of $4,137.15, $4,205 and $4.115.20, respectively, signed by Charles H. Ward, and indorsed by the defendants, and on four promissory notes of $2,997.87, $4,481.96, §4,694.83 and §5,897.43, respectively, signed by Charles W. Clement, and indorsed by the defendants, and also on two other promissory notes of §5,316.29 and §5,132.26, respectively, signed by L. J. Orcott and indorsed by the defendants. on the validity of the protest, cited : Pattee v. McCrillis, 53 Maine, 410; Mass. Stat. 1882, c. 77, § § 8-22; Daniel, Neg. Instruments, § 1017; Malden Bank v. Baldwin, 13 Gray, 154; Allen v. Avery, 47 Maine, 287 ; McQoun v. Walker, 49 Maine, 419 ; Bradley v. Davis, 26 Maine, 51; King v. Crowell, 61 Maine, 244 ; Gilbert v. Dennis, 3 Met. 495; Warren v. Gilman, 17 Maine, 360; Freeman's Bank v. Perkins, 18 Maine, 292; Flint v. Rogers, 15 Maine, 67 ; Lord v. Appleton, 15 Maine, 270; Lambert v. Chiselin, 9 How. 552 ; Saco Nat. Bank v. Sanborn, 63 Maine, 340; Grafton Bank v. Cox, 13 Gray, 503 ; Requa v. Collins, 51 N. Y. 144; Bank of Utica v. Phillips, 3 Wend. 408 ; 1 Greenl. Ev. § 40; 33 Alb. L. J. 478 ; Abb. Trial Ev. 433, 434; Bank v. DeGroot, 7 Hun, 210; Pearce v. Langfit, 100 Penn. St. 507; Wood v. Callaghan, 28 N. W. Eep. 162; Berridge v. Fitzgerald, L. E. 4 Q. B. 639 ; Fastern Bank v. Brown, 356; Harrison v. Bailey, 99 Mass. 620; Keyes v. Winter, 54 Maine, 401; Cornor v. Pratt, 138 Mass. 446 ; Byles, Bills, (7 Am. ed.) 304; Bank of Com. v. Law, 127 Mass. 72; Fuller v. Hooper, 3 Gray, 334. No protest was required since the notes were for the accommodation of the indorsers. Daniel, Neg. Inst. § 1086 el seq. ; Blenn v. Lyford, 70 Maine, 149. Continuance is a matter of discretion. E. S., c. 70, § 51; c. 82, § 54; Schwartz v. Drinkwater, 70 Maine, 409 ; Barker v. Haskell, 9 Cush. 222. Notice mailed to the defendants at 268 Purchase Street, Boston, after they had made an assignment of all their property to F. A. Wyman, and abandoned the premises to him, was an insufficient notice to charge the defendants as indorsers of the plaintiff’s notes. Because it is held that notice to the voluntary assignee of an indorser is insufficient to charge the indorser Avith liability. House, Assignee, v. Vinton Co. Hat. Bank, (Sup. Court of Ohio, January 16, 1885,) Reporter, August 26, 1885, p. 247. It Avas likewise held that demand made at the maker’s place of business, then occupied by his assignee, was insufficient in Armstrong v. Thurston, 11 Md. 148, and Benedict v. Caffe, 5 Duer, N. Y. Superior Court, 226. In Granite Bank v. Ayers, 16 Pick. 392, the court nonsuited the plaintiffs, on the ground that no proper demand had been made upon the makers, and intimated that no proper notice had been given to the indorsers. In the case of the Bank of America v. The Shawn, 142 Mass. 290, the decision in the appellate court was upon the facts as already found, and they differed materially from the facts in the case at bar. Deposit in street letter boxes was, under the circumstances, insufficient notice to charge the defendants as indorsers. The ordinary rule is, that where personal notice is given at an indorser’s place of business, it must be given in business hours, and, "if left after these hours, it Avill not be deemed sufficient,” &c., &c. Story on Prom. Notes, § 315. The rules in the United States Courts, to stay all suits, whether such as Avould be barred or not by discharge (unless in cases of inexcusable laches of the debtors), is imperative. R. S., U. S., § 5106; In re Rosenberg, 3 Benedict, 14; In re Chirardelli, 1 Sawyer, 343; Ray v. Wight, 119 Mass. 428. At the conclusion of the bankruptcy proceedings, if the claim was secured by a prior attachment or other lien, the courts under the United States practice render, in case the debtor Avas discharged, only a special judgment to be satisfied out of the debtor’s estate. Doe v. Childress, 21 Wall. 642; Peck v. Jenness, 7 How. 612; Bowman v. Harding, 56 Maine, 559 ; Leighton v. Kelsey, 57 Maine, 85 ; Franklin Bank v. Batch-elder, 23 Maine, 60; Kittredge v. Warren, 14 N. H. 509; Matter of Rowell, 21 Verm. 620; Johnson v. Collins, 116 Mass. 392; Stockwell v. Silloway, 113 Mass. 382; Davenport v. Tilton, 10 Met. 320; Bates v. Tappan, 99 Mass. 376. In the state insolvency courts of Maine, although customary to stay suits pending insolvency, the rule is not imperative, but discretionary ; hence, in case of claim which would not be barred, the Supreme Court rightfully refused to stay proceedings, because no damage could ensue to any parties thereby. Schwartz v. JDrinlewater, 70 Maine, 409. In those cases, under the insolvency laws where plaintiff’s claims are such as would not be barred by the debtor’s discharge, it is held that his person is exempt from arrest, the court rendering a special judgment only. Ohoteau v. Richardson, 12 Allen, 3(35. The reason why special judgments are allowed after the debtor’s discharge, is thus stated by Tenney, J., in Franklin Rank v. Batchelder, 23 Maine, 65. If the judgment is rendered in this case pending the insolvency proceedings, it will create a new debt which will not be barred by the defendants’ discharge therein. Woodbury v. Perkins, 5 Cush. 86 ; Faxon -v. Baxter, 11 Cush. 35. The contract by Wyman for the purchase of these notes, made without the consent of the defendants, with condition of forfeiture both of agreement and of payments, was not within the purview of his powers as general assignee. Contracts by parties having limited powers in excess thereof are void. Williams v. Fvans, L. B. 1 Q. B. 352. In Smead v. Wiggins, 3 Ga. 94, which was a case of an agreement by plaintiff providing for payment in certain instalments, the second instalment not being made at the stipulated time, the court held the agreement forfeited (time being of the essence of the contract), but the plaintiff credited the payments upon his judgment.